Govt will bring in a law to make mandatory for MSMEs dues to be paid within 45 days, says Nitin Gadkari

By Bhavya Kaushal|22nd Jan 2021
All MSME receivables should be paid within 45 days. Delayed payment is a major problem faced by MSMEs. We are thinking to bring a law to protect their interests, Union Minister Nitin Gadkari said.
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In a move to strengthen the micro, small, and medium enterprises (MSMEs) sector and the 'Aatmanirbhar Bharat,' initiative, the Indian government is looking at bringing in law, ensuring MSME dues are paid within 45 days, Nitin Gadkari, Union Minister of MSME, said recently.


MSME receivables are one of the major challenges faced by small business owners. These delayed payments lead to a working capital lockdown, which, in turn, creates a lot of mismanagement of resources, money, and operations despite the capital flow.

Addressing the All India Association of Industries, the minister said, "All MSME receivables should be paid within 45 days. Delayed payment is a major problem faced by MSMEs. We are thinking to bring a law to protect their interests."

The minister added that the Indian government is making a proposal to introduce legislation, mandating public sector undertakings (PSUs) to settle the dues of MSMEs within 45 days of sale.

Small businesses

The announcement comes less than a month after the minister had said the government is contemplating fresh plans and laws to find a solution to the receivables issue as outstanding dues are creating a working capital problem for the sector.


The COVID-19 pandemic crippled the MSME sector significantly, impacting their financial health. The Rs 20 lakh-crore Aatmanirbhar Bharat stimulus package, which rolled a slew of schemes, including the Rs 3 lakh-crore collateral-free loan, brought some relief to the sector, especially after the small business owners saw a 20 to 30 percent decline in their revenues because of the pandemic.


On Wednesday, the finance ministry said that banks sanctioned an additional Rs 15,571 crore under the Emergency Credit Line Guarantee Scheme (ECLGS 2.0) to MSMEs that were impacted by the coronavirus pandemic.


In a tweet, the ministry said the Centre announced ECLGS 1.0 to provide financial support to MSMEs and ECLGS 2.0 to guarantee credit support for stressed sectors.


Edited by Suman Singh